Book contents
- Frontmatter
- Contents
- Preface to the Second Edition
- 1 MARKETS AND GOVERNMENTS
- 2 INSTITUTIONS AND GOVERNANCE
- 3 PUBLIC GOODS
- 4 PUBLIC FINANCE FOR PUBLIC GOODS
- 5 MARKET CORRECTIONS
- 6 VOTING
- 7 SOCIAL JUSTICE
- 8 ENTITLEMENTS
- 9 CHOICE OF TAXATION
- 10 THE NEED FOR GOVERNMENT
- TOPICS FOR DISCUSSION
- Author Index
- Subject Index
- References
This chapter is part of a book that is no longer available to purchase from Cambridge Core
2 - INSTITUTIONS AND GOVERNANCE
Book contents
- Frontmatter
- Contents
- Preface to the Second Edition
- 1 MARKETS AND GOVERNMENTS
- 2 INSTITUTIONS AND GOVERNANCE
- 3 PUBLIC GOODS
- 4 PUBLIC FINANCE FOR PUBLIC GOODS
- 5 MARKET CORRECTIONS
- 6 VOTING
- 7 SOCIAL JUSTICE
- 8 ENTITLEMENTS
- 9 CHOICE OF TAXATION
- 10 THE NEED FOR GOVERNMENT
- TOPICS FOR DISCUSSION
- Author Index
- Subject Index
- References
Summary
A society's “institutions” determine norms and incentives of personal conduct. Legal institutions determine how or whether the rule of law is provided. Political institutions determine political behavior and how voters' collective decisions are made and implemented. Social institutions determine whether people make long-term commitments to one another. The market is an institution. Private property is an institution, as is collective property.
Institutions persist independently of the identity of individuals: congress or parliament is independent of the identity of incumbent political representatives; a government bureaucracy is independent of the identity of incumbent bureaucrats; and a judiciary or court system is independent of who the judges happen to be at any time. When incumbent judges, political representatives, or bureaucrats depart, the institutions remain. The market is independent of who buys and who sells, and the institution of private property is independent of who owns the property.
Governance is the activity of governing and exercising the authority of government. When taxpayer and voter interests are well served by governments, governance is described as good. Conversely, governance is inadequate or bad when the authority of government is exercised in ways that benefit the people in government, their family, and their friends rather than the taxpayers and voters.
Through consequences for the quality of governance, institutions determine whether public finance and public policy can improve on market outcomes when societies seek efficiency and social justice.
- Type
- Chapter
- Information
- Public Finance and Public PolicyResponsibilities and Limitations of Government, pp. 71 - 134Publisher: Cambridge University PressPrint publication year: 2009
References
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, 2007. Price adjustment under the table: Evidence on efficiency-enhancing corruption. European Journal of Political Economy 23:423–47.CrossRefGoogle Scholar
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, 1971. The theory of economic regulation. Bell Journal of Economics and Management Science 2:3–21.CrossRefGoogle Scholar
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, 1983. Contradictions and Dilemmas: Studies on the Socialist Economy and Society. Corvina, Budapest, and MIT Press, Cambridge MA.Google Scholar
, 2008. The limits of equality: Insights into the Israeli kibbutz. Quarterly Journal of Economics 123:1111–59.CrossRefGoogle Scholar
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, and , 2005. Economic Origins of Dictatorship and Democracy. Cambridge University Press, New York.CrossRefGoogle Scholar
, and , 2007. Why is the world short of democracy?: A cross-country analysis of barriers to representative government. European Journal of Political Economy 23:582–604.CrossRefGoogle Scholar
, and , 1999. Why do some countries produce so much more output per worker than others?Quarterly Journal of Economics 114:83–116.CrossRefGoogle Scholar
, and , 1995. Institutions and economic performance: Cross-country tests using alternative institutional measures. Economics and Politics 7:207–27.CrossRefGoogle Scholar
, , , and , 1999. The quality of government. Journal of Law, Economics and Organization 15:222–79.CrossRefGoogle Scholar
, 1973. The control of politicians: An economic model. Public Choice 14:19–42.CrossRefGoogle Scholar
, 1990. The last period problem in politics: Do congressional representatives not subject to a reelection constraint alter their voting behavior?Public Choice 65:167–80.CrossRefGoogle Scholar
, 2006. Principled Agents?: The Political Economy of Good Government. Oxford University Press, Oxford.Google Scholar
, , , and , 2003. Who owns the media?The Journal of Law and Economics 46:341–82.CrossRefGoogle Scholar
, and , 2008. Competition and truth in the market for news. Journal of Economic Perspectives 22:133–54.CrossRefGoogle Scholar
, 2008. Media freedom, political knowledge, and participation. Journal of Economic Perspectives 22:155–69.CrossRefGoogle Scholar
, and , 1993. Reconciling voters' behavior with legislative term limits. Journal of Public Economics 50:1–14.CrossRefGoogle Scholar
, 1982. Declining industries and political-support protectionist motives. American Economic Review 72:1180–7. Reprinted in , , and (Eds.), 2008. Forty Years of Research on Rent Seeking 2: Applications: Rent Seeking in Practice. Springer, Berlin, pp. 105–12.Google Scholar
, 1976. Toward a more general theory of regulation. Journal of Law and Economics 19:171–240.CrossRefGoogle Scholar
, 1980. Rent seeking and profit seeking. In , , and (Eds.), Toward a Theory of the Rent-Seeking Society. Texas A&M University Press, College Station, pp. 3–15.Google Scholar
, 1980. Competitive process, competitive waste, and institutions. In , , and s (Eds.), Toward a Theory of the Rent Seeking Society. Texas A&M University Press, College Station, pp. 153–79.Google Scholar
, and , 2000. Political culture and economic decline. European Journal of Political Economy 16:189–212.CrossRefGoogle Scholar
., 1974. The political economy of the rent-seeking society. American Economic Review 64:291–303.Google Scholar
, 1967. The welfare costs of monopoly, tariffs, and theft. Western Economic Journal 5:224–32.Google Scholar
, , and (Eds.), 2008. Forty Years of Research on Rent Seeking 1: The Theory of Rent-Seeking. Springer, Berlin.
, , and (Eds.), 2008. Forty Years of Research on Rent Seeking 2: Applications: Rent Seeking in Practice. Springer, Berlin.CrossRef
, , and , 2005. Choosing the size of the public sector under rent seeking from state coffers. European Journal of Political Economy 21:830–50.CrossRefGoogle Scholar
, 1988. The Economics of Special Privilege and Rent Seeking. Kluwer Academic Publishers, Boston.Google Scholar
, 1912. Political obstacles to anti-trust legislation. Journal of Political Economy 20:588–98.CrossRefGoogle Scholar
, 1986. Rent-seeking aspects of political advertising. Public Choice 49:249–65. Reprinted in Congleton et al., 2008.CrossRefGoogle Scholar
, , and , 2005. Comparative analysis of litigation systems: An auction-theoretic approach. Economic Journal 115:583–601.CrossRefGoogle Scholar
, and , 1999. Legal expenditure as a rent-seeking game. Public Choice 100:271–88.CrossRefGoogle Scholar
, 2002. Rent seeking through litigation: Adversarial and inquisitorial systems compared. International Review of Law and Economics 22:193–216.CrossRefGoogle Scholar
, and , 1987. Seeking rents by setting rents: The political economy of rent seeking. Economic Journal 97:685–99. Reprinted in Congleton et al., 2008.CrossRefGoogle Scholar
., 1997. Money for Nothing: Politicians, Rent Extraction, and Political Extortion. Harvard University Press, Cambridge MA.Google Scholar
, and , 1997. Delegation in contests. European Journal of Political Economy 13:281–98.CrossRefGoogle Scholar
, and , 1987. Hierarchical structure and the social costs of bribes and transfers. Journal of Public Economics 34:129–42. Reprinted in Congleton et al., 2008.CrossRefGoogle Scholar
, , and , 1980. Mercantilism as a rent-seeking society. In , , and (Eds.), Toward a Theory of the Rent Seeking Society. Texas A&M Press, College Station, pp. 235–68. Reprinted in Congleton et al., 2008.Google Scholar
, 1994. The internal organization of government. Oxford Economic Papers 46:1–29.CrossRefGoogle Scholar
, and , 1990. Congressional influence on bureaucracy. Journal of Law, Economics, and Organization 6:1–20.CrossRefGoogle Scholar
, and , 1988. Government and its bureaucracy: A bilateral bargaining versus principal–agent approach. In , , and (Eds.), The Political Economy of Rent Seeking. Kluwer Academic Publishers, Boston, pp. 267–90.CrossRefGoogle Scholar
, , and , 1997. Assessing the performance of performance standards in public bureaucracies. American Economic Review 87:389–95.Google Scholar
., 1884/1972. The Origin of the Family, Private Property and the State. Pathfinder Press, New York.Google Scholar
, 1938. On the Economic Meaning of Socialism. (Ed.), University of Minnesota Press, Minneapolis.Google Scholar
, 1887/1994. Capital: A Critical Analysis of Capitalist Production. (Ed.), Progress Publishers, Moscow.Google Scholar
, 1987. Freedom, property rights, and innovation in socialism. Kyklos 40:461–75.CrossRefGoogle Scholar
, and , 1997. Soviet venality: A rent-seeking model of the communist state. Public Choice 93:37–53.CrossRefGoogle Scholar
, and , 1986. Illegal activities and purges in a Soviet-type economy: A rent-seeking perspective. International Review of Law and Economics 6:87–99. Reprinted in Congleton et al., 2008.CrossRefGoogle Scholar
, 2007. Price adjustment under the table: Evidence on efficiency-enhancing corruption. European Journal of Political Economy 23:423–47.CrossRefGoogle Scholar
, and , 1984. Risk-averse rent-seekers and the social cost of monopoly power. Economic Journal 94:104–10.CrossRefGoogle Scholar
, and , 1989. Politically contestable rents and transfers. Economics and Politics 1:17–39.CrossRefGoogle Scholar
, and , 1987. Dissipation of contestable rents by small numbers of contenders. Public Choice 54:63–82.CrossRefGoogle Scholar
, 1980. Efficient rent-seeking. In , , and (Eds.), Toward a Theory of the Rent-Seeking Society. Texas A&M University Press, College Station, pp. 97–112.Google Scholar
, 1971. The theory of economic regulation. Bell Journal of Economics and Management Science 2:3–21.CrossRefGoogle Scholar
, and , 1987. Economics of Cooperation and the Labor-Managed Economy. Harwood, Chur, Switzerland.Google Scholar
, 1982. Is there a case for employee ownership? In and (Eds.), The Transition from Socialism in Eastern Europe: Domestic Restructuring and Foreign Trade. The World Bank, Washington DC, pp. 83–104.Google Scholar
, 1992. Policy effectiveness in reforming socialist economies. In and (Eds.), The Transition from Socialism in Eastern Europe: Domestic Restructuring and Foreign Trade. The World Bank, Washington DC, pp. 13–39.Google Scholar
, 1983. Contradictions and Dilemmas: Studies on the Socialist Economy and Society. Corvina, Budapest, and MIT Press, Cambridge MA.Google Scholar
, 2008. The limits of equality: Insights into the Israeli kibbutz. Quarterly Journal of Economics 123:1111–59.CrossRefGoogle Scholar
, 1987. Kibbutz efficiency and the incentive conundrum. In (Ed.), Incentives and Economic Systems. New York University Press, New York, pp. 228–63.Google Scholar